Crude oil prices extended their losses, falling to their lowest level in three months after OPEC+ confirmed plans to increase production starting in April. The decision has raised concerns about an oversupply in the market, weighing on investor sentiment and driving prices lower.
Brent crude dropped below $72 per barrel, while West Texas Intermediate (WTI) fell to around $70 per barrel, marking a sharp decline from recent levels. The move comes as oil traders react to the prospect of more supply entering the market at a time when economic uncertainty and global demand fluctuations remain key concerns.
OPEC+ had originally planned to begin unwinding its output cuts in late 2024 but delayed the decision multiple times in response to volatile market conditions. Now, the alliance appears set to gradually return 2.2 million barrels per day over the next 18 months, with flexibility to adjust based on price stability and demand trends.
Adding to the market’s uncertainty, new U.S. trade policies have introduced fresh economic risks. Investors are closely watching the potential impact of recently announced tariffs, which could slow global trade and dampen energy demand. The combination of weaker economic growth projections and increasing oil supply has put downward pressure on prices.
Despite the slide in crude prices, OPEC+ has emphasized that its production strategy remains data-driven and flexible. The group has indicated that it could pause or reverse supply increases if market conditions worsen, leaving room for adjustments based on economic indicators.
For now, the oil market remains in a fragile balance, with investors weighing supply expectations against demand uncertainty. As OPEC+ implements its production plans, market participants will be watching for signals on whether demand can keep pace with the anticipated supply increase.
